How to combat a team maxing their ticket prices.

[jpeters1734]

OOTP has a little known issue(I would assume since I've never read anything about it) regarding ticket prices and minimum attendance. No matter how high you set ticket prices, the lowest average attendance you can get is 10% of capacity. Just by setting your ticket price to max, you can lead the league in gate revenue in most setups.

I am posting this on behalf of Jazzrack in the CLB. We are trying to figure out the best way of going about this. I have attached a screen shot of a test I ran for 11 seasons. It is too beneficial to not max your ticket prices with the minimum attendance being 10%.

I also linked the thread so you can see our thoughts on it.

We would really appreciate any ideas.

Pre-winter meetings and ideas.

[Bluenoser]

Why not just prevent teams from changing ticket prices? That is why that option was added.

[jpeters1734]

Originally Posted by Bluenoser

Why not just prevent teams from changing ticket prices? That is why that option was added.

That goes against the corporate aspect of the league. we want people to be able to adjust prices.

I wish there was an option for a max ticket price.

[TribeFanInNC]

I think you are just going to have to have a house rule for max tix price for the league. From that table, there doesn't appear to be much advantage to going up to like $6 or $7 max ticket price. I'm not sure how the other factors play into it (like FI level).

Or maybe just say that teams are not allowed to set a ticket price that provides attendance < 15% of capacity. Maybe that would work better. Still annoying to police that kind of stuff though.

[BIG17EASY]

You could impose a penalty/fine for any teams who have a ticket price above "x" and attendance "y" percent below capacity. A bit of a pain to check, but the fine would negate any monetary advantage a team would earn.

[jpeters1734]

the ideal solution would be to figure a financial setup that would make it a disadvantage to max ticket prices. Too many house rules can be overwhelming to new members. good ideas though.

[RchW]

Originally Posted by jpeters1734

That goes against the corporate aspect of the league. we want people to be able to adjust prices.

Corporations have rules about pricing all over the US. It is a felony I believe to use predatory pricing geographically and selling below cost is also a crime. So having a rule would be completely consistent with a corporate league structure.

[jpeters1734]

Originally Posted by RchW

Corporations have rules about pricing all over the US. It is a felony I believe to use predatory pricing geographically and selling below cost is also a crime. So having a rule would be completely consistent with a corporate league structure.

That may be true, but making money is a big part of the CLB. It would remove a big part of that process

[BIG17EASY]

Originally Posted by jpeters1734

the ideal solution would be to figure a financial setup that would make it a disadvantage to max ticket prices. Too many house rules can be overwhelming to new members. good ideas though.

Then you're asking for something that doesn't exist. There are no settings to negate the loophole of maximizing ticket prices. The only way to stop it is to set up a house rule of some sort.

[The Wolf]

Originally Posted by RchW

Corporations have rules about pricing all over the US. It is a felony I believe to use predatory pricing geographically and selling below cost is also a crime. So having a rule would be completely consistent with a corporate league structure.

"Pricing below your own costs is also not a violation of the law unless it is part of a strategy to eliminate competitors, and when that strategy has a dangerous probability of creating a monopoly for the discounting firm so that it can raise prices far into the future and recoup its losses. In markets with a large number of sellers, such as gasoline retailing, it is unlikely that one company could price below cost long enough to drive out a significant number of rivals and attain a dominant position." - the FTC

[jpeters1734]

lets not make this a discussion on business practices. There has to be some way of editing this leagues finances to make it work. Would increasing the attendance base line work? I would think the further away from the minimum 10%, the better. but if we did that, how would we cut money out?

[RchW]

Originally Posted by The Wolf

"Pricing below your own costs is also not a violation of the law unless it is part of a strategy to eliminate competitors, and when that strategy has a dangerous probability of creating a monopoly for the discounting firm so that it can raise prices far into the future and recoup its losses. In markets with a large number of sellers, such as gasoline retailing, it is unlikely that one company could price below cost long enough to drive out a significant number of rivals and attain a dominant position." - the FTC

Not retail

[marc5477]

Well, in the real world, if something like this were to happen, competitors would capitalize on the easy money and they would all set their ticket prices to max. Just go to all the teams and set their tickets to max. You probably wont find an elegant solution to this because the person doing it is clearly gaming the system. I am not sure if there is any sort of penalty for doing this in terms of fan loyalty or market size. Will be interesting to see if it actually changes anything.

[joefromchicago]

I don't understand the problem here. You don't want a house rule regarding max ticket prices, but you also don't want anyone getting an unfair (and unrealistic) advantage by maxing ticket prices. The solution is simple: everyone should max their ticket prices. There, problem solved!

Granted, you may not like the fact that fans are only filling 10% of the stadium for each game, but then if you really want to do something about that, you'll need to drop your opposition to setting a cap on ticket prices (or your opposition to prohibiting owners from setting ticket prices). Sometimes you can't have everything.

By the way, do you also have a cap on the size of stadiums? That's also something that isn't covered in the game, and there's no game option to prevent owners from setting the stadium size themselves. If you (as I suspect) have a house rule limiting the size of stadiums, what's stopping you from having a house rule limiting the price of tickets?

[TomVeal]

Originally Posted by RchW

Corporations have rules about pricing all over the US. It is a felony I believe to use predatory pricing geographically and selling below cost is also a crime. So having a rule would be completely consistent with a corporate league structure.

No, it isn't illegal to vary prices in different areas or to sell goods or services below cost (though the latter is rarely, if ever, rational).

The OOTP economic model probably doesn't synch with real life at the extremes, but, in an on-line league, that's not a serious problem. Every GM can set a high admission price. In a solo league, only players who get a thrill from throwing crooked dice will use this tactic.

[jazzrack]

hi all, I would have jumped in earlier, but I again killed the website upgrading it. happens every-time

anyway.

yes, we have conflicting values, that's why we are here. We want to make sure that we have given it a proper examination.

so for a bit of context, when the league first started somebody wasn't thinking, set his ticket prices at the standard 10 and moved on about his business. somebody noticed and I ran a quick analysis and it looked like that because we have visiting gate share & revenue sharing at 33% it seemed to come out more or less a wash. so most of us put it out of our minds and no longer think about it. Some new owners come around and asked a reasonable question so we are looking at it again.

the visuals don't bother us, but if either my initial analysis was wrong or because of league/game version evolution the financials don't work the way we assumed, we need some form of change.

Now if that change is upping the gate & revenue sharing to 50%, some other combination of game settings or even an external rule creating a ticket price range is the question at hand. We are hoping the those with more knowledge/experience could help us make sure we have given the subject a proper going over before a final decision is made.

[jazzrack]

I finally got a chance to go over some historic data and I think it's more a theoretical problem rather than a practical one. at least in the CLB and at this point

Originally Posted by jpeters1734

That may be true, but making money is a big part of the CLB. It would remove a big part of that process

actually, profit is a big part of the CLB, it's an important distinction as we analyze this. and I am replying to the whole thread, not just you

while it is true, the long term effect of this has been a theoretical budget substantially larger than the rest, the same forces that encourage that behavior also encourage you not to spend it. and with our relatively high revenue sharing, the more profit you make the more you fund your competition.

the clb judges an owner in 2 ways. 1 is wins and losses & the other is our Charlie-O award, a basic formula that rewards the balancing of profit & wins. in both categories this has been a losing strategy. we store our almanacs & Charlie-O scores online so everybody can follow along or judge yourself. but goodyear (the team in question) is 734-814 (46 was the first human year) has only made the playoffs once and has never finished higher than 7th in the Charlie-O.

and if you think about it, the only way to "exploit it" would be to go balls to the wall for one thing or the other, and then it's just as likely to go all Godzilla on you and turn around an eat Tokyo.

according to the data (current pricing)

our most winning teams: Union Pacific $1.30, Exxon $1.78 & L.L.Bean (nike in previous years, same owner)$3.25

our best at playing for the Charlie-O, US Robotics $1.35

frankly, the evidence shows, at least in the CLB environment, the system works & if you can make it work you should win some form of prize. it would be well earned.

but, the conversation does expose a potential issue, not so much with the ceiling, but the floor. that we can fix with simple, small upward adjustments of the revenue sharing over time with accompanying increases in salary expectations.

Are we 20 individual businesses in direct competition or are we 1 business with 20 franchises feeding off of each other for mutual benefit? or something in between? Playing in the CLB is a highly complex game, with a wide variety of strategies being played. It is our biggest strength and a potential achilles heal but also what makes us so damn interesting.

[joefromchicago]

In game theoretic terms, what you're describing is a Prisoner's Dilemma. If a player can gain an advantage by maxing his ticket prices, then he'll do it, even though everyone might be better off if nobody maxed their ticket prices. Given that payoff structure, we should expect that everyone will eventually max their prices, even if they'd prefer that nobody did it.

The way to change a game like this is to change the payoff matrix. You've done that already, to some extent, by creating an award that recognizes players for their cost-effectiveness, as well as by instituting a luxury tax. Another way is (as already discussed) is to institute a house rule regarding maximum ticket prices. You could also change the home-visitor split to 30-70 or 20-80, so that the majority of the home team's increased revenues would go to the visiting team (although that might lead to a "race to the bottom," which would be equally undesirable).

[jpeters1734]

If you look at 1954's financial report, you will see that there is no way to match revenue with a team that maxed their ticket price. Even the team that led the league in attendance still fell $1 Million short in gate revenue.

I don't think that increasing revenue sharing is the answer because half of 2,500,000 is still more than half of 1,500,000. Only if we increase revenue sharing to 100% would it make max ticket prices a non factor. If we did that then we'd have to find a different way to distribute revenue to the high performers.

[joefromchicago]

Originally Posted by jpeters1734

If you look at 1954's financial report, you will see that there is no way to match revenue with a team that maxed their ticket price. Even the team that led the league in attendance still fell $1 Million short in gate revenue.

True, and, in purely economic terms, the players who are not maxing out their ticket prices are acting irrationally. Or, in game theoretic terms, they are getting stuck with the "sucker's payoff." As I pointed out, the only way to change the behavior is to change the way the payoffs are structured. Right now, there's an advantage to maxing out ticket prices. The way to end the advantage that a few players have right now is for everyone to max out their prices. Either that, or figure out some way to make it less advantageous for players to do that.